UN’s $100 Billion Green Climate Fund Delayed by U.S. Concern

Dec. 1 (Bloomberg) -- The U.S., Saudi Arabia and Venezuela
joined to raise concerns about the United Nations Green Climate
Fund, delaying work on the mechanism aimed at delivering as much
as $100 billion a year in aid to developing nations.

The objections raise the risk that the measure won’t be
finished in time for the Dec. 9 conclusion of the UN global
warming talks in Durban, South Africa. It’s one of the key
proposals envoys from more than 190 nations are working to
include in a package fighting climate change.

The move is a setback for the chances of an agreement in
Durban. It follows comments from China and Brazil indicating
they’re unlikely to sign up to a new deal unless industrial
nations make new commitments on reducing fossil fuel emissions
under the Kyoto Protocol, whose limits lapse at the end of 2012.
The U.S., European Union, Japan, Russia, Canada and Australia
are seeking a treaty that goes beyond Kyoto’s restrictions,
capping output in China and India too.

“Reopening the text could jeopardize the fund because the
text is the result of one year of negotiations,” said Stefan
Krug, climate finance spokesman for Greenpeace International.
“You’ll get a domino effect as everyone asks for changes.”

The Green Climate Fund’s delay opens a new set of issues
that UN officials must clear up before ministers arrive for the
conclusions of talks next week. They had hoped to win
endorsement for the fund’s operational structure as early as
today, leaving more controversial political issues, including
the future of Kyoto, for ministers.

Brazil and China

Asked whether he could envision any agreement at the talks
in Durban without industrial nations signing up to a new round
of reductions under Kyoto, Brazil’s envoy said, “no.” China’s
lead negotiator, Su Wei, said Nov. 29 that failing to extend the
agreement would place the international system of climate rules
in “peril.”

Yesterday, Maite Nkoana-Mashabane, the South African
minister overseeing the annual round of climate talks, said
she’d undertake “informal” consultations about how to overcome
objections to technical details about how the fund will work.
She stopped short of reopening the text for debate by delegates.
Some delegations supported the measure as it stands.

‘Urgency’

“Given the urgency and seriousness of the climate change
challenge, the operationalization of the Green Climate Fund
cannot be delayed,” said Selwin Hart, the envoy from Barbados.
“We will not support any effort to undermine or delay the
operationalization of this fund here in Durban.”

The U.S., Saudi Arabia and Latin American nations in the
Alba negotiating bloc say they can’t accept a draft plan for a
green climate fund.

The draft raises “substantive concerns” and contains
“errors and inconsistencies,” said Jonathan Pershing, a State
Department envoy leading the U.S. delegations. He didn’t
elaborate his concerns. The Venezuelan envoy, speaking on behalf
of Alba, said the plan would hurt developing countries’ access
to resources. Oil-rich Saudi Arabia wants to be compensated for
the costs of addressing climate change.

“The Saudis want funding for response measures to be
included. The response to climate change has economic costs, and
they want to be compensated for the adverse impacts of the
global response, e.g. on oil revenues,” Steve Herz, climate
finance spokesman for the Sierra Club, said in an interview in
Durban. “It’s a poisonous concept.”

Cancun to Durban

Countries agreed at UN talks in Cancun last year to work on
setting up a green climate fund this year in Durban. It’s part
of a broader agreement aimed at fighting climate change. A 40-member committee spent seven months drafting rules for the
fund’s structure and governance. The fund is intended to channel
an unspecified portion of climate aid that developed nations
have pledged to ramp up to $100 billion by 2020.

Alba, which includes Bolivia, Venezuela, Nicaragua and
Ecuador, called for the text to be reopened to debate at a
meeting of all nations at the UN talks. That would open a
“Pandora’s box” and may kill chances for a decision in Durban,
said Singapore’s chief climate negotiator, Burhan Gafoor.

“All members of the committee wanted to design a
thoroughbred race horse, and we ended up with a camel,” Gafoor
said. “What we have may not be elegant, but it’s balanced and
it’s sturdy.”

U.S. Position

The U.S. didn’t go as far as to call for more debate.
Rather, Pershing said more work needs to be done and deferred
the matter to Mashabane for resolution.

While Pershing didn’t specify the U.S. objections, Herz of
the Sierra club said among them are the governance of the fund,
which the U.S. wants separated from the United Nations.

“It’s going to be more difficult to fund if it’s seen as a
UN body,” Herz said. “It’ll be difficult to get money out of
Congress.”

Pershing said countries were “rushed” to approve the
draft plan at an October meeting in Cape Town and a “small
amount” of work still needs to be done that can be finished by
the end of next week.

Introducing the document to the conference, Trevor Manuel,
a South African minister who was one of three leaders of the
drafting committee, said the plan is “balanced and presents a
good middle ground.”

Venezuela and Alba

Venezuelan envoy Claudia Salerno said in an interview that
Alba nations object to a clause in the document suggesting
developing countries could also contribute to the fund.

“It can’t be that their presidents go to a meeting and
offer this money, and now they want to put their hands in my
pocket,” Salerno said, referring to a pledge made in Copenhagen
in 2009 by leaders of industrialized countries to channel an
annual $100 billion in aid to the developed world by 2020.

Chinese negotiator Su said in an interview yesterday that
establishing the fund “is a benchmark for the success of the
Durban conference.”